Paid Sick Leave Credit Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6221 To allow a tax credit for employers under the Internal Revenue Code of 1986 for certain mandated paid sick leave. IN THE HOUSE OF REPRESENTATIVES MARCH 12, 2020 Mr. HARDER of California introduced the following bill; which was referred to the Committee on Ways and Means A BILL To allow a tax credit for employers under the Internal Revenue Code of 1986 for certain mandated paid sick leave. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Paid Sick Leave Credit 4 Act of 2020’’. 5 SEC. 2. PAYROLL CREDIT FOR REQUIRED PAID SICK 6 LEAVE. 7 (a) IN GENERAL.—In the case of a employer who 8 elects (at such time and in such manner as the Secretary 9 may provide) the application of this section there shall be 10 VerDate Sep 11 2014 04:16 Mar 23, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6221.IH H6221 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 6221 IH allowed as a credit against the tax imposed by section 1 3111(a) of the Internal Revenue Code of 1986 for the first 2 calendar quarter beginning after such election an amount 3 equal to the excess (if any) of— 4 (1) 90 percent of the qualified sick leave wages 5 paid by an employer by reason of the requirements 6 of section 2 of the Emergency Paid Sick Leave Act; 7 over 8 (2) the aggregate credits allowed under this sec- 9 tion with respect to all prior calendar quarters. 10 (b) LIMITATIONS.— 11 (1) WAGES TAKEN INTO ACCOUNT.—The 12 amount of qualified sick leave wages which may be 13 taken into account under subsection (a) for the tax- 14 able year with respect to any individual shall not ex- 15 ceed— 16 (A) for any day (or portion thereof) the in- 17 dividual is on sick leave during the taxable year, 18 $511; and 19 (B) in the aggregate for any four consecu- 20 tive calendar quarters, $7,156. 21 (2) CREDIT LIMITED TO CERTAIN EMPLOYMENT 22 TAXES.—The credit allowed by subsection (a) with 23 respect to any calendar quarter shall not exceed the 24 tax imposed under section 3111(a) for such calendar 25 VerDate Sep 11 2014 04:16 Mar 23, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6221.IH H6221 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 6221 IH quarter on the wages paid with respect to the em- 1 ployment of all individuals in the employ of the em- 2 ployer. 3 (3) CARRYOVER OF UNUSED CREDIT.—If the 4 amount of the credit under subsection (a) exceeds 5 the limitation of paragraph (2) for any calendar 6 quarter, such excess shall be carried to the suc- 7 ceeding calendar quarter and allowed as a credit 8 under subsection (a) for such quarter. 9 (c) QUALIFIED SICK LEAVE WAGES.—For purposes 10 of this section— 11 (1) IN GENERAL.—The term ‘‘qualified sick 12 leave wages’’ means wages (as defined in section 13 51(c)(1) of the Internal Revenue Code of 1986, but 14 without regard to section 3306(b)(2)(B) of such 15 Code) paid or incurred by an employer to an em- 16 ployee with respect to employment for a period dur- 17 ing which such employee is on sick leave with the 18 employer. 19 (2) ONLY ADDITIONAL PAID SICK TIME TAKEN 20 INTO ACCOUNT.—In the case of any employer with 21 a sick leave plan in effect on March 12, 2020, only 22 wages in excess of the wages the employer would 23 have otherwise paid such employee (but for section 24 VerDate Sep 11 2014 04:16 Mar 23, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6221.IH H6221 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 6221 IH 2 of the Emergency Paid Sick Leave Act) under 1 such plan shall be taken into account. 2 (3) SICK LEAVE WAGES MUST MEET REQUIRE- 3 MENTS OF ACT.—Wages shall not be taken into ac- 4 count under this section unless such wages meet the 5 requirements of, and are required by, section 2 of 6 the Emergency Paid Sick Leave Act. 7 (d) SPECIAL RULES.— 8 (1) CERTAIN RULES TO APPLY.—For purposes 9 of this section, rules similar to the rules of sections 10 51(i)(1) and 52 of the Internal Revenue Code of 11 1986 shall apply. 12 (2) RELATED EMPLOYERS.—For purposes of 13 this section, all persons treated as a single employer 14 under subsection (b), (c), (m), or (o) of section 414 15 of such Code shall be treated as 1 employer. 16 (3) DENIAL OF DOUBLE BENEFIT.—No deduc- 17 tion shall be allowed under such Code for the portion 18 of wages paid or incurred for the taxable year which 19 is equal to the sum of the credits determined under 20 this section for calendar quarters ending in such 21 taxable year. Rules similar to the rules under the 22 second sentence of section 280C(a) of such Code 23 shall apply for purposes of the preceding sentence. 24 VerDate Sep 11 2014 04:16 Mar 23, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6221.IH H6221 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 6221 IH (e) TRANSFERS TO FEDERAL OLD-AGE AND SUR- 1 VIVORS INSURANCE TRUST FUND.—There are hereby ap- 2 propriated to the Federal Old-Age and Survivors Trust 3 Fund and the Federal Disability Insurance Trust Fund 4 established under section 201 of the Social Security Act 5 (42 U.S.C. 401) amounts equal to the reduction in reve- 6 nues to the Treasury by reason of subsection (a). Amounts 7 appropriated by the preceding sentence shall be trans- 8 ferred from the general fund at such times and in such 9 manner as to replicate to the extent possible the transfers 10 which would have occurred to such Trust Fund had such 11 paragraphs not been enacted. 12 (f) REGULATIONS.—The Secretary shall prescribe 13 such regulations as may be necessary to carry out the pur- 14 poses of this subsection, including— 15 (1) regulations to prevent the avoidance of the 16 purposes of the limitations and aggregation rules 17 under this subsection through the use of successor 18 companies or other means, 19 (2) regulations to minimize compliance and 20 record-keeping burdens under this subsection, and 21 (3) regulations for recapturing the benefit of 22 credits determined under this section in cases where 23 there is a subsequent adjustment to the credit deter- 24 mined under subsection (a). 25 VerDate Sep 11 2014 04:16 Mar 23, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6221.IH H6221 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 6221 IH (g) TERMINATION.—This section shall not apply to 1 any wages paid more than 2 years after the date of the 2 effective date of the Emergency Paid Sick Leave Act. 3 Æ VerDate Sep 11 2014 04:16 Mar 23, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H6221.IH H6221 kjohnson on DSK79L0C42PROD with BILLS